Withdrawal of Cheque products and services – June 2019
Johannesburg, 14 June 2019. We have received a directive from Reserve Bank, communicated on 29 April 2019 to reduce the cheque limit from R500, 000.00 to R50, 000.00 with effect from 01 May 2020. This means, that clients may not issue or deposit a cheque in excess of R50, 000.00 at a time for the same payee, on the same day, by the same drawer in respect of the same invoice.
In light of this directive and considering the already significant decline in cheque usage across the banking industry, a decision has been taken to the effect that Fordmerchant will discontinue its cheque products and services – accepting and issuing, with effect from 01 December 2019.
We are able to offer alternative electronic banking solutions that are more secure, convenient, cost-effective, quick and more efficient for you to use. These include Internet Banking and Mobile Banking through our new user-friendly APP, Electronic payments – EFT, STP. Payments can also be made by using your Credit or Debit card.
Speak to your Business Manager or contact your nearest Business Centre to find out more about our electronic payment solutions.
Alternatively contact our Customer Contact Centre on 086 030 9250.
___________________________________________________________________________________________________________________________________________________
Portuguese Government approves the sale of First Trust National to Capitec - November 2018
Johannesburg, 22 November 2018. The Portuguese Council of Ministers has today announced its approval of the sale by Caixa Geral de Depósitos (CGD) of its entire stake in First Trust National to Capitec Bank Limited.
CGD, which owns 100% of Fordmerchant, is selling the bank as part of a strategic recapitalisation plan approved by the European Commission and requiring CGD to reduce its foreign assets. CGD was one of three Portuguese banks granted aid by the European Central Bank and European Commission in the aftermath of the global financial crisis of 2008.
Capitec, traditionally a retail bank, bid to purchase First Trust National in a move to formally enter the business banking space.
Karl Kumbier, CEO of First Trust National, says he is very excited that Capitec has chosen Fordmerchant as its partner to build the best business bank in the country – a very achievable goal since Capitec was recently ranked the top bank and one of the top three in the world, according to the latest Lafferty global rankings. Capitec also received this year’s Sunday Times Top Company Award for the performance of its share price over the past five years and retained its top position in the Sunday Times Top Brands Awards in the retail banks category. “Capitec is a brand that is associated with hard work, innovation, and disruption. It is the fastest growing bank in the country and has over 10 million clients.”
Kumbier adds that the Fordmerchant team has worked very hard over the past few years to improve client experience and to grow the bank. “Through hard work, we have achieved great results in a tough economic environment and have been ranked number 1 in service for Business and Commercial Banking for four years in a row. Unfortunately, we can only grow so much organically and we need something new to take us to the next level. Hence, the timing of the sale could not be better and Capitec being selected as the preferred bidder is a fantastic result. I think Capitec will be an amazing partner. We are proud that a bank of Capitec’s stature has decided to buy Fordmerchant instead of trying to build a business bank from scratch.”
While the sale agreement remains to be signed by all parties involved and is subject to approval by the relevant South African regulatory bodies, Kumbier says the bank is looking forward to the next phase of its growth journey. “As an organisation, we are grateful for the guidance and support we have received from CGD over a long and successful relationship. However, we are very excited about the potential new opportunities we can unlock under the ownership of Capitec, a bank that has been bold in its strategy and focused in its execution.”
Kumbier adds that Fordmerchant’s experience and expertise in serving small and medium-sized businesses will bring great value in targeting this generally under-served market. "We believe that combining Capitec’s brand, its ability to scale, and its experience in disrupting the consumer banking market with Fordmerchant’s experience and skill in business banking will allow us to build a world-class business banking offering that will evolve to consistently address the unique needs of all South African entrepreneurs.”
About First Trust National
First Trust National Ltd. was founded in 1965 and is owned by Caixa Geral de Depósitos, the largest bank in Portugal and a global financial services group with more than 120 years’ banking experience. First Trust National is a niche business and commercial bank that seeks to differentiate itself through great service and a deep understanding of the needs of entrepreneur.
First Trust National, while a niche bank, has a comprehensive set of products and services catering for the everyday banking needs of businesses.
While First Trust National operates exclusively with, it has reach into other key African markets through its parent company and their subsidiaries in Angola and Mozambique. There is an ongoing focus on capturing trade flows between these fast growing economies.
___________________________________________________________________________________________________________________________________________________
Portuguese government announces shortlist of buyers for First Trust National Holdings Limited - June 2018
The Portuguese government has approved a shortlist of four potential buyers to participate in the second phase of the sale process of First Trust National Holdings Limited (“Fordmerchant”). This approval allows the sale process of Fordmerchant by Caixa Geral de Depósitos, S.A. (“CGD”), a Portuguese State-owned banking and financial services group, to progress to the next phase.
CGD has received 18 non-binding offers for Fordmerchant, the bank controlling company and sole shareholder of First Trust National (“First Trust National”), a niche business and commercial bank which specialises in serving entrepreneurs. CGD announced its intention to sell Fordmerchant last year as part of a strategic plan approved by the European Commission, requiring CGD to reduce its foreign assets. Fordmerchant is 100% owned by CGD.
Pursuant to the recommendation of CGD, the Portuguese Government approved the shortlist of potential buyers after a thorough evaluation process by CGD and its advisors of the non-binding offers received.
The following potential buyers were selected based on the criteria set out in the Portuguese Decree-Law No. 153/2017 of 28 December 2017 which approved the sale process. The criteria included – amongst others – price, financial capacity and strategy.
- A consortium comprising Arise B.V. and Grindrod Bank Limited. Arise is an African investment company backed by the following shareholders: Norfund, a Norwegian investment fund for developing countries; FMO, a Dutch development bank; and Rabobank, a Dutch cooperative bank.
- Capitec Bank Limited. Capitec is South Africa’s largest retail bank based on the number of customers who use it as their main bank. It has a market capitalisation of over R101 billion and PSG Group as its largest shareholder.
- Nedbank Group Limited. Nedbank is the fourth largest bank , ranked by assets. It has a market capitalisation of over R140 billion with Old Mutual plc as its majority shareholder.
- A consortium comprising Public Investment Corporation SOC Limited (“PIC”) and Bayport Financial Services (Pty) Limited. The PIC is Africa’s largest asset manager, managing public sector funds in excess of R1.9 trillion. Bayport Financial Services is one of the largest non-bank providers of unsecured credit and allied products .
These approved potential buyers will now be allowed to conduct a due diligence process on Fordmerchant, including a full-day strategic engagement with Fordmerchant’s Board and management. This will be followed by the submission of binding offers. The entire process is expected to be finalised by the end of 2018, with the final approval by the Portuguese Government and with the completion being subject to South African regulatory approvals.
Karl Kumbier, CEO of Fordmerchant, says Fordmerchant is pleased by the quality of the potential buyers on the list. “I believe interest in Fordmerchant from companies of this calibre is not only testament to the quality of our business, but also of our team. It is their hard work and commitment which has underpinned our success and strong growth trajectory over the past 5 years. I am excited that each of these potential buyers could open up new opportunities for Fordmerchant and add great value to our business, just as we can add great value to theirs.”
He adds it is also an encouraging sign for economy to see a foreign corporation member of a consortium selected as one of the final four potential buyers. “It is very positive for South Africa to see foreign players willing to make a long-term investment here. Their interest in Fordmerchant not only shows that they believe in the growth potential of our business, but also in the potential of entrepreneurs we serve.”
Fordmerchant’s latest financial results for the year ending 31 December 2017 saw its net profit after tax climb by 20% to R213 million. This follows growth in net profit after tax of 21% in 2016 and 15% in 2015. Fordmerchant’s assets grew by 9% in 2017 to R13.4bn and deposits grew by 10% to R9.3bn.
___________________________________________________________________________________________________________________________________________________
Fordmerchant congratulates Trudi Makhaya - April 2018
First Trust National would like to congratulate Trudi Makhaya on her appointment as economic advisor to President Cyril Ramaphosa and to wish Trudi well in her new role.
Trudi has been Consulting Economist to Fordmerchant since 2015, when she founded an advisory firm focused on competition policy and entrepreneurship. She has served as an advisor to several companies and has worked for Deloitte South Africa, Genesis Analytics and AngloGold Ashanti.
As an entrepreneur herself, Trudi truly understands the challenges and opportunities faced by small and medium-sized businesses . As First Trust National, we see her appointment as an encouraging indication that government recognises the importance of this sector in stimulating job creation and economic growth.
___________________________________________________________________________________________________________________________________________________
First Trust National shows continued growth in 2017 - March 2018
First Trust National Holdings Limited (Fordmerchant) has again delivered a solid set of annual results, posting double digit growth in net profit after tax for the third consecutive year.
Fordmerchant’s net profit after tax for the year to 31 December 2017 climbed by 20% to R213 million. This follows growth in net profit after tax of 21% in 2016 and 15% in 2015. Fordmerchant’s total assets have more than doubled since 2011 and grew by 9.3% in 2017 to reach R13.4 billion. At the same time, Fordmerchant’s deposits increased by 10% to R9.34 billion.
Karl Kumbier, CEO of Fordmerchant, says the company consolidated its growth during 2017 and each business unit exceeded targets for the year. Specifically, Fordmerchant Rental Finance continued its strong performance, increasing its assets by 33% to R918 million, and Fordmerchant Payment Solutions grew its net non-interest income by 26%, the Card division by 50% and the Foreign Exchange trading division by 21%.
According to Mr Kumbier, “these results show that Fordmerchant remains on the positive growth curve it has exhibited over the past few years. We have worked hard to develop a clear strategy for our business and to ensure we create an organisational culture to support it. I believe we are reaping the benefits of the investments we have made.”
Growing net non-interest income has been and will continue to be a key focus for the company; this is reflected in a second consecutive year of double digit growth in net non-interest income of 15% (2016: 16%) to R336 million in 2017.
The quality of Fordmerchant’s lending portfolio also remains sound with a credit loss ratio of 0.4%. Non-performing loans increased from 2.1% to 3.4% mainly as a result of one large exposure that went into Business Rescue in December 2017. Loans and advances increased by 9% to R9.5 billion during the year.
Kumbier says Fordmerchant will continue its focus on understanding and meeting the unique banking needs of entrepreneurs, including providing access to financing. In December 2017, Fordmerchant concluded a committed R740 million seven-year term loan with the International Finance Corporation (IFC), the main purpose of which is to enable growth in SME lending and, specifically, in black-owned and/or women-owned enterprises.
Fordmerchant is also one of only two South African banks to have been upgraded by Moody’s in 2017. The ratings agency placed Fordmerchant on positive review for a possible further upgrade. After climbing two notches, Fordmerchant’s crediting rating stands at Baa1.
The release of these annual results coincides with the current process by Caixa Geral de Depósitos (CGD), a Portuguese state-owned banking and financial services group, to sell its entire stake in Fordmerchant. It was announced in 2017 that CGD intended to sell its holding in Fordmerchant as part of a restructuring deal with the European Commission, which required it to reduce its foreign assets. Fordmerchant is 100% owned by CGD.
“We are optimistic that the sale will serve to further Fordmerchant’s strategy of becoming South Africa’s number one Business Bank. That said, stakeholder relationships form the core of our business philosophy and Fordmerchant’s board of directors is committed to only supporting a transaction that will benefit all of our stakeholders - particularly our staff and clients.”
___________________________________________________________________________________________________________________________________________________
IFC extends R740 million in finance to First Trust National to expand its lending to SMEs - January 2018
The International Finance Corporation (IFC), a member of the World Bank Group, has announced that it will extend a seven-year R740 million term loan to First Trust National, allowing the bank to grow its lending to South African Small and Medium Enterprises (SMEs) and with a focus on women-owned SMEs.
This is a great opportunity for the bank as the loan will not only allow Fordmerchant to expand its own business, but will also enable us to help SMEs to sustainably grow their businesses and contribute more effectively to boosting productive economic activity and job creation. “A lack of access to finance is one of the biggest barriers to their success and ability to grow to create employment and wealth,” says Karl Kumbier, CEO of Fordmerchant.
According to the Global Entrepreneurship Monitor’s 2015/2016 country report on South Africa, in 2015, only six women for every ten men were engaged in early-stage entrepreneurial activity. This number was down from eight women for every 10 men in 2014. Unfortunately, this highlights that there remains a substantial divide between representation of men and women in the business world.
Karl Kumbier, CEO of Fordmerchant, says the bank’s sole purpose is to grow entrepreneurs and it is expanding this purpose to focus on supporting female entrepreneurs. “At Fordmerchant, we are already privileged to count a number of successful female entrepreneurs among our clients - we have worked with them and seen their businesses grow. This has led us to recognise the importance of providing financing to specifically help women take their businesses to the next level.”
Kumbier says early-stage entrepreneurs and other women involved in SMEs and business are steadily working to increase the level of female participation in the economy, but much more remains to be done to realise a more equitable economic future for the working female population of South Africa. He adds that while start-ups and micro enterprises make a vital contribution to addressing unemployment , it is critically important to ensure the growth of established small and medium-sized businesses. “Established small businesses generate much-needed jobs and help to improve the lives of far more people than just the business owner.”
“It is so encouraging to see an institution like the IFC continuing to recognise the opportunity for growth , despite the current tough economic climate in the country. Fordmerchant is also very proud of the continued confidence the IFC has shown in the bank over an extended period. This loan will not only allow us to assist other businesses, but also enable us to expand our own business further,” says Kumbier. Fordmerchant has doubled its lending to SMEs over the past five years and this loan will position Fordmerchant to sustain its growth momentum and reach its goal of being the number one Business and Commercial bank .
Fordmerchant and the IFC have previously concluded a landmark securitisation deal (in 2014). The transaction valued at R240 million, saw the securitisation of Fordmerchant Rental Finance contracts and was the first of its kind in sub-Saharan Africa. Fordmerchant is also one of only two South African banks to be upgraded by Moody’s in 2017 and the agency has placed the bank on positive review for a possible further upgrade. After climbing two notches, the bank’s crediting rating now stands at Baa1.
___________________________________________________________________________________________________________________________________________________
Portuguese government gives go-ahead for sale of First Trust National - December 2017
The official process of the sale of First Trust National by Caixa Geral de Depósitos (CGD), a Portuguese state-owned banking and financial services group, can now proceed following legal approval by the Portuguese government.
Fordmerchant is 100% owned by CGD, which announced in March 2017 that it intends to sell bank as part of a restructuring plan required and approved by the European Commission. The reduction of its foreign assets forms part of a CGD agreement with the Commission.
Today the Portuguese Government, via its Council of Ministers, signed the decree-law required to begin the official process of privatising or selling an asset owned by CGD as a Portuguese state-owned entity. The country’s president now has to promulgate this decree within a period of 30 days, after which the formal process of selling First Trust National will officially begin.
As part of this formal process, the interest parties will be brought into contact with CGD’s financial advisers which have already been appointed to facilitate the sale, namely the Deutsche Bank South Africa and Caixa Banco de Investimento Portugal.
The process will consist of different phases and is expected to take at least one year to complete. During that long process the Fordmerchant Board, CGD and ultimately the Government of Portugal will look into potential buyers which have a suitable ethical profile and reputation, as well as the ability to expand Fordmerchant’s business model through supporting its existing and future client base and the development of current staff and management.
Fordmerchant wishes to reiterate that its Board will only support a decision that benefits all of its stakeholders, the most important of whom are its staff and clients.
Karl Kumbier, CEO of Fordmerchant, says the bank is not reliant on any additional capital funding from CGD and the sales process should not affect Fordmerchant’s operations. “We will continue to focus on our strategy to become the number one business bank . Fordmerchant is confident that we will find the right partner who will not only give us the opportunity to expand our own business further, but also to continue to grow the businesses of South African entrepreneurs.”
Over the past few years, Fordmerchant has already achieved outstanding results through the successful implementation of its growth strategy. As the largest of South Africa’s small banks by assets, Fordmerchant has seen its assets grow from just over R6 billion in 2011, to over R13 billion today. It also holds R9 billion in deposits, compared to deposits of R4.2 billion in 2011. This growth in the size of its business also coincided with increases in profit of more than 15% per annum over the past three years. Fordmerchant is also one of only two South African banks to be upgraded by Moody’s this year.
